Technology

Warning to check ride-hailing surge pricing on New Year's Eve

Revelers have been warned to budget and plan ahead for surge pricing by e-hailing services on New Year’s Eve,

Both Uber and Taxify implement "dynamic pricing" when demand increases to encourage drivers to go onto the roads.

Alon Lits, general manager of Uber sub-Saharan Africa, said the service's pricing algorithms are determined by demand and supply. And on New Year's Eve demand soars.

"Drivers also have a lot of things they could be doing on New Year’s Eve. They might want to spend time with their family …or do private trips. We need to make sure drivers are also incentivised to come and ride," Lits said in an interview with Fin24 earlier in December.

He added that unlike the hotel industry and restaurants, which automatically charge high prices on New Year’s Eve, Uber fares will only increase if demand in an area is high.

Uber and Taxify display the surge pricing in their apps which they say prevents unpleasant surprises at the end of a trip.

Lits said people have the option to wait a couple hours, for demand to cool and avoid the increased fees.

Earlier in December, the ride-on-demand company refunded Global Citizen concert goers who were charged surge pricing fees despite the firm’s initial commitment to not hike fares.

Uber previously said that due to the chaotic situation around the FNB Stadium in Johannesburg, surge pricing was implemented to incentivise drivers to enter the area and transport people home.

* Correction. An earlier version of this article stated that on New Year's Eve demand for e-hailing services "sours". The correct word is "soars". This has been changed in the text.